Daniel Loeb

Daniel Loeb

Last Update: 05-13-2016

Number of Stocks: 37
Number of New Stocks: 13

Total Value: $10,857 Mil
Q/Q Turnover: 25%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Daniel Loeb Watch

  • Is Seasonal Investing the Best Way to Approach the Market?

    What happens when the markets stop making sense? How do you even begin to analyze which stocks to invest in?


    Over the last two years, markets have defied conventional theories, rallied even when the global economies appeared to be struggling and in the process managed to sway several investors into believing that everything was on a roll.

      


  • Daniel Loeb Comments on Danaher

    Danaher (DHR) is a diversified multi-industrial company with an increasing exposure to life science and healthcare-oriented businesses. Operating across five different business segments and built up through over 400 acquisitions over the company’s history, the cornerstone for Danaher’s successful integration and value creation strategy has been the


    Danaher Business System (DBS). Adapted from Japanese principles of kaizen, DBS has evolved into a set of processes and corporate culture revolving around continuous improvement, helping to drive organic growth and annual margin improvement across Danaher’s portfolio.

      


  • Daniel Loeb Comments on Chubb Ltd.

    Chubb Ltd. (CB) is the product of ACE Limited’s acquisition of The Chubb Corporation which closed in January. The deal combined two world-class operators that have consistently put up ~90% combined ratios – almost 900bps better than North American peers – and have compounded book value at 10%+ the past decade, more than double that of peers. The new Chubb is the largest public pure-play P&C company by underwriting income. It also has a number of factors we look for in a pro forma situation: an A+ CEO in Evan Greenberg; complementary fit across products, distribution, and geography; and a plan that is less focused on short-term cost savings than long-term strategic opportunities for growth, which are abundant.


    Chubb’s scale and focus on growth could not come at a better time as certain competitors scale back operations to satisfy shareholder demands. We are willing to forego short-term cost cuts or buybacks to own a franchise that is a long-term winner with the premier franchise in US high-net-worth insurance, #1 share in global professional lines, and an enviable global platform with leading A&H and personal lines in Asia and Latin America. We view Chubb as a high-quality compounder in the financials space, with double-digit earnings growth potential over the next few years. Critically, this earnings power is far less sensitive to rates and credit quality than fundamental execution.

      


  • Daniel Loeb Comments on Charter Communications

    Charter Communications (CHTR) is a domestic provider of voice, video, and high-speed data. In May 2015, Charter announced the acquisition of Time Warner Cable. This is a transformational deal that quadruples the company’s scale while driving substantial operating efficiencies. Importantly, the pro forma company will be led by Charter’s current CEO, Tom Rutledge, who we view as one of the best operators in the industry.


    New Charter is well positioned to capture market share from satellite and telco competitors given its advantaged high-speed data product. In addition, Mr. Rutledge’s track record of boosting video penetration, driving down service costs, and executing large network transformations at legacy Charter makes us optimistic about his leadership of the new entity.

      


  • Daniel Loeb Comments on Molson Coors Brewing Company

    TAP (NYSE:TAP), on the other hand, stands to benefit greatly from acquiring divested assets. The company is picking up the remaining 58% share of the MillerCoors US joint venture that it does not already own, the perpetual rights to import legacy SAB global brands such as Peroni in the US, and the global rights to the Miller brand. The transaction is highly accretive for TAP given the sheer size of the acquired assets. It also gives the company full control over its most important market, something that ought to improve operational effectiveness and increase the long-term strategic value of the company to a potential acquirer as the global beer industry continues to consolidate. As is the case with BUD, we believe TAP will compound nicely over the next several years as the market more fully appreciates the earnings power and strategic optionality of the pro forma company.

    From Daniel Loeb (Trades, Portfolio)'s first quarter 2016 shareholder letter.   


  • Daniel Loeb Comments on Anheuser Busch InBev

    The long awaited acquisition of SAB Miller (SAB) by Anheuser Busch InBev (BUD) announced late last year created two interesting pro forma situations. The deal, expected to close in the second half of 2016, will combine the two largest global brewers and create an unrivaled player with strong pricing power in an increasingly consolidated global industry. It will also transform Molson Coors (TAP) into a stronger regional competitor following the acquisition of certain SAB assets that must be sold for anti-trust reasons.


    Starting with BUD, we think the stock ought to grow nicely over the next several years as the true earnings power of the new company is revealed. Part of the gains will come from improving the underlying profitability of SAB, as operational control of its assets is transferred to BUD’s highly regarded management team led by CEO Carlos Brito. Another part will come from the capture of deal-related cost and revenue synergies, as duplication is eliminated and BUD’s global brands like Budweiser, Corona, and Stella are rolled out to legacy SAB markets in Africa and Latin America. Finally, the rest should come from financial engineering as BUD’s under-levered balance sheet is monetized to help finance the transaction. We also think the new company will likely command a higher valuation as SAB’s emerging market exposure will be accretive to top line growth over time.

      


  • Daniel Loeb Comments on Dow Chemical

    We are encouraged by the latest developments in our investment in Dow (DOW) which announced a merger with DuPont in December. In February, the company revealed that long-time CEO Andrew Liveris will be stepping aside not long after the merger’s completion. DuPont’s CEO, Ed Breen, is a proven operator and capital allocator. Breen made his mark by streamlining Tyco, a long-time industrial conglomerate, splitting the company into focused units and thus created enormous shareholder value. He brings an unbiased perspective and is not afraid to challenge the status quo, two qualities that will be essential in leading Dow/DuPont given the histories of both of these conglomerates.


    We continue to believe there is potential for operational improvement at Dow that would be incremental to the $3 billion announced synergy target; in aggregate, approximately $5 billion of earnings improvement could be unlocked. The merger structure preserves both companies’ strong balance sheets which, combined with fading Sadara and Gulf Coast CapEx, should allow for meaningful capital return while maintaining a strong investment grade balance sheet. Taking all of these factors into account, we believe the pro forma entity is capable of generating $5.50 – 6.00 of EPS in 2018. Given that these earnings will consist of contributions from several focused spinoffs, we also believe that multiple expansion is likely.

      


  • Quality Guru Stocks Include Amgen, Comcast

    According to GuruFocus’ All-in-One Screener, the following stocks have a high business predictability rating and at least five gurus are shareholders in the companies.


    WestRock Co. (WRK)

      


  • Why Dan Loeb Is Adding to His Green Brick Position

    Green Brick Partners (NASDAQ:GRBK) is a land development company with a bank of land in favorable parts of the Dallas and Atlanta areas. In addition it owns controlling interests (of exactly 50%) in four homebuilding companies.


    The company was set up and customized around 2008 by guru David Einhorn (Trades, Portfolio), of Greenlight Capital and Jim Brickman, who was going to lead it. Brickman has 35 years of experience in the business. Einhorn owns ~50% of the equity and Brickman around 10% through various names. They called it Green Brick. Get it?

      


  • Daniel Loeb Adds to Stake in Green Brick Partners

    Daniel Loeb (TradesPortfolio) added 99,943 shares to his stake in Green Brick Partners Inc. (NASDAQ:GRBK) on April 8.


    Green Brick Partners (formerly known as BioFuel Energy Corp.) was incorporated as a Delaware corporation on April 11, 2006. The company began its original operations with the intention of solely investing in BioFuel Energy LLC, a limited liability company organized on Jan. 25, 2006. The company's goal was to build and operate ethanol production facilities in the Midwestern U.S.

      


  • Art Collecter Daniel Loeb Adds Sothebys to Portfolio

    Guru Daniel Loeb (Trades, Portfolio) is a California native who grew up in Santa Monica. Loeb received his bachelor's at Columbia and spent the next 11 years working for various firms including Warburg Pincus, a private equity firm. He then landed a job working as director of corporate development at Island Records, a record label where he focused on securing debt financing.


    After his time at Island Records, Loeb seized an opportunity to work as a risk arbitrage analyst at Lafer Equity Investors, and then from 1991 to 1994 he worked as senior vice president in the distressed debt department at Jefferies LLC. Loeb increased his knowledge and experience about bankruptcy analysis, trading bank loans and selling distressed securities. In 1995, Loeb founded Third Point Management LLC, which has grown to a total value of about $9.86 billion.

      


  • Dan Loeb's Third Point Portfolio Highly Concentrated

    Daniel Loeb´s Third Point disclosed an equity portfolio valued at some $9.86 billion at the end of the fourth quarter of 2015. The equity portfolio is mainly invested in Health Care (53%), Materials (17%) and Consumer Discretionary (11%) stocks.


    Among the 10 largest holdings from Loeb’s equity portfolio (which compose 82.43% of the total portfolio value) at the end of the fourth quarter, the three top positions are Baxter International Inc. (NYSE:BAX), Allergan PLC (NYSE:AGN) and Amgen Inc. (NASDAQ:AMGN).

      


  • 3 Attractive Asset Management Firms


    Charlie Bobrinskoy recently appeared on CNBC and shared his insights regarding several of the value investing firm’s long positions.

      


  • Third Point's Quarterly Letter

    Markets are off to a tumultuous start for the year, as many indices show1: the S&P (- 10.3%); the NASDAQ (-14.7%); the DAX (-18.5%); the NIKKEI (-17.4%); and the Shanghai Composite index (-21.9%). Last year’s darlings like Amazon (NASDAQ:AMZN) (-25.5%) and Netflix (NASDAQ:NFLX) (-24.5%) have fallen meaningfully in 2016, but hardest hit have been some companies seen as “value” stocks like Williams (NYSE:WMB) (-48.3%), Bank of America (NYSE:BAC) (-33.7%), and Morgan Stanley (NYSE:MS) (- 31.4%). We believe the indices’ drastic declines actually fail to capture the true carnage revealed when you take a closer look at the breadth of S&P companies experiencing massive losses. In some cases, these losses may represent permanent value destruction. The 2015 market we dubbed a “Haunted House” feels about as scary as the Disney (NYSE:DIS) kids’ ride “It’s a Small World” when compared to 2016.


    Last August, we recognized that a global tidal shift in monetary policy and a reversal in central bank policy would likely cause fund flows out of many asset classes. We reduced our exposure to companies that were economically sensitive or tied to China or to commodity pricing while significantly increasing our short exposure. For the remainder of 2015, we generated profits on the short side but were hurt by our decision to seek safe haven in health care names and other companies we believed would remain sheltered from the new world order. We succeeded in avoiding calamitous losses in the portfolio and preserved our clients’ capital in 2015.

      


  • Daniel Loeb Buys Axalta, Morgan Stanley, Chubb

    Daniel Loeb (Trades, Portfolio) made three new additions to his portfolio in the fourth quarter: Chubb Ltd. (NYSE:CB), Morgan Stanley (NYSE:MS) and Axalta Coating System Ltd. (NYSE:AXTA).


    Loeb manages the event-driven, value-investing hedge fund Third Point, which has $17.5 billion in assets. Third Point’s main Offshore Fund was down 3.4% in January, versus a 5% loss for the S&P 500. He has achieved a historical annualized return of 15.9%, compared to 7% for the index.

      


  • Dan Loeb's Third Point Re a Good Bet in Declining Markets

    As we wrote in our previous article on Third Point Re (NYSE:TPRE), Daniel Loeb's investment record is beyond reproach. Since 1995, he has generated one of the best long-term investment track records in history, averaging 19.5% annual returns for over 20 years.


    As you can see below, however, the past year or two has been tough for value investors. In 2014 and parts of 2015, his fund lagged the markets. Third Point Re (his reinsurance company that invests in his hedge fund's strategy) is down almost 40% from its highs in 2014. Even if you don't believe that markets will continue to rise, buying into his investment strategy through shares of Third Point Re may be a great idea.

      


  • Facebook, McDonald's Among Guru Stocks Outperforming S&P 500

    The following are some of the stocks that outperformed the S&P 500 Index over the last 12 months and have been bought by gurus during the last quarter.


    Facebook Inc. (FB) with a market cap of $327.41 billion, during the last 12 months has outperformed the S&P 500 Index by 55.7% and currently, 14 gurus are holding the stock that has returned 14% year-to-date and 205% during the last five years. It is now trading with a P/E ratio of 116.45 but according to the DCF calculator, it looks overpriced by 1,000%.

      


  • Dan Loeb's Third Point Re a Tremendous Value

    It’s not often that you can buy into a legendary value investor hedge fund at a discount. Third Point Re (NYSE:TPRE) might be the exception.


    Ever since Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) found long-term success, hedge fund managers have scrambled to set up their own insurance companies. In this structure, the insurance entity focuses on underwriting policies, while the premiums are managed by the hedge fund manager.

      


  • Stocks Trading With Low PS Ratio, Wide Margin of Safety

    According to GuruFocus' All-In-One Screener, the following are stocks of companies with a market cap above $5 billion that are trading with a very low P/S ratio.


    Dow Chemical Co. (DOW) is trading at about $41 with a P/S ratio of 0.98, a trailing 12-month P/E multiple of 10.69 and an estimated forward P/E multiple of 10.49. The company has a market cap of $47.87 billion and over the last 10 years, the stock has dropped by 3%. During the last 52 weeks, the price has been as high as $57.10 and as low as $35.11.

      


  • Jana Partners Dumping Half of Hertz Holdings

    Guru Jana Partners (Trades, Portfolio) seriously started racking up its exposure to Hertz (NYSE:HTZ) at the end of 2014.


    Ultimately Jana Partners (Trades, Portfolio) owned about 41 million shares of the car rental business that owns the Hertz, Dollar, Thrifty and Firefly brands. Its network of rentals spans the globe with storefronts across North America, Europe, Latin and South America, Asia, Australia, Africa, the Middle East and New Zealand. Back at the end of August the company started decreasing its exposure, but now it has seriously cut back on its stake, selling 44.70% at once.

      


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